A PHENOMENOLOGICAL STUDY OF AFFORDABLE HOUSING FOR THE MIDDLE-INCOME POPULATION IN ABUJA, NIGERIA
by
Joseph Usunobu Aluya
A Dissertation Presented in Partial Fulfillment of the Requirements for the Degree Doctorate in Business Administration
UNIVERSITY OF PHOENIX
3294995 2008
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MIDDLE-INCOME POPULATION IN ABUJA, NIGERIA
by
Joseph Usunobu Aluya
November 2007
Approved:
Tathagata Dasgupta, Ph.D., Mentor Jeff Bruns, Ph.D.. Committee member Craig Barton, Ph.D., Committee member
Accepted and Signed:
Tathagata Dasgupta, Ph.D. Date
Accepted and Signed:
Date
Accepted and Signed:
Craig ~ a r t t h . ~ . Date
Dawn Iwamoto, Ed.D.
Dean, School of Advanced Studies University of Phoenix
ABSTRACT
A qualitative, phenomenological study using a modified van Kaam method by Moustakas (1994) with audiotape and semi-structured transcribed interviews was conducted with a purposeful sampling of 30 individuals in Abuja, Nigeria. From the inductive experiences of the middle-income population, the study explored a lack of affordable housing as it affects the target population. To support and complement participant’s responses from the qualitative interview questions, a five-point, Likert-type 25 quantitative survey
questionnaires was administered to the participants. The research question was how does
the lack of affordable housing impact the middle-income population? A lack of
affordable housing was imperatively linked to double-digit interest rates attached to loans and the income range of the middle-income populations. Socioeconomic and stakeholders theories were used to conceptualize the concept of the lack of affordable housing.
Research findings indicated that the economic infrastructure affects housing for the middle-income population. Because of the city’s inadequate infrastructure development, a lack of affordable housing affects middle-income population (Bowditch & Buono, 2001; Newan, Ridenour, Newman, & DeMarco, 2003). The significance of study was to bring awareness to Nigerian leadership how the lack housing affects the middle income population. Recommendations for the stakeholders are to collaborate and seamlessly work to enhance technological information exchanges on housing. Externally, the International Monetary Fund, the World Bank Group, Habitat for Humanity, and the United Nations Educational, Scientific, and Cultural Organization to horizontally and vertically engage Nigerian banks to start granting low-interest loans for housing.
DEDICATION
I dedicate this study to Nigerians whom have followed same path and to my family (living and in heaven). To my mother- Iyawo Esther Ibhakhomu-Aluya in heaven, your grace, handwork, generosity, and kindness are all imbibed in me. Thank you mother, and your passing on to God’s calling during my journal towards this terminal degree only strengthen me. Mother, your struggle in life to survive and to be a productive person in the society and that was an inspiration for me. To my sister, Josephine Idedia, I dedicate present dissertation to you. Looking at our humble upbringing, the Almight God
complemented us in a unique way. To my wife, Bibiana Aluya, I equally dedicate current study to you. Your contribution and support cannot be understated. Thanks for the three kids, which present study is dedicated. Justin, Brianna, and Chrystal, you are all
wonderful kids and you were very supportive throughout this journey. Finally, I thank the almighty God for your guidance. In Isaiah 54:17. No weapon formed against me shall prosper…. No one can take away your destiny. People might delay our destiny but our destiny is in our hands. Remember, you can always inspire to be the best you can possibly be. Even the rejected stone became the pillar of the house.
ACKNOWLEDGMENTS
First, let me acknowledge the Almighty God, the omnipotent and the omnipresent in our lives. Special thanks goes to my beautiful wife, Bibiana, your sacrifices,
dedications, and devotions to the family cannot be overemphasized. You always insist that I finished whatever I started. Special thanks goes to my children, Justin, Brianna, and Chrystal, for the time which current project took from them.
Second, special thanks goes to the Central Bank of Nigeria, especially the
research department. The Central Banks employees’ speed, efficiency, and effectiveness in which survey questions were answered and returned to me within a short period of time was unprecedented. Special thanks goes to C. Omordi, C. M. Okafor, C. Anoya, and the entire Central Bank of Nigeria research department, Abuja.
Third, special thanks goes to A. Salihu of the Federal Capital Territory
Administration (FCDA) and F. Bello for their help and directions in Abuja. Thanks to Alex Odiase for also helping in the collation of the research materials. Thanks to Alex and Bello for the research materials you collected from the participants. Finally, special thanks goes to those who have impacted indelible knowledge into me. How can you really thank people who impacted knowledge to others, but to say thanks? Thanks to Dr. T. Dasgupta., Dr. J. Bruns., and Dr. C. Barton. These intellectuals and academicians were the shinning light that guided my hands through a dark tunnel. I say thank you.
TABLE OF CONTENTS
LIST OF TABLES... xv
LIST OF FIGURES ...xvi
CHAPTER 1: INTRODUCTION ... 1
Background of the Problem ... 2
Statement of the Problem... 4
Purpose of the Study ... 6
Significance of the Problem... 7
Significance of Research to Leadership... 8
Nature of the Study ... 9
Research Questions... 11 Theoretical Framework ... 12 Definition of Terms... 14 Assumptions... 18 Limitations ... 18 Delimitations... 18 Summary ... 18
CHAPTER 2: REVIEW OF THE LITERATURE ... 20
Documentation... 20
Theoretical Framework ... 21
Housing for the Middle-Income Population ... 24
Governmental Policies... 27
Availability or Lack of Affordability... 35 Private Sector ... 37 Electronic Marketplace ... 39 Communication... 41 Culture ... 48 Summary ... 50 Conclusion ... 51 CHAPTER 3: METHOD ... 53 Research Design... 53 Appropriateness of Design... 54 Research Questions... 56 Population ... 56 Informed Consent... 57 Sampling Frame ... 57 Confidentiality ... 58 Geographic Location... 58 Instrumentation ... 58 Data Collection ... 61 Data Analysis ... 61
Validity and Reliability... 63
Summary ... 64
CHAPTER 4: PRESENTATION AND ANALYSIS OF DATA... 66
Methodology... 66
Data Analysis ... 74
Findings... 77
General Overview... 77
Data Clustering and Thematizing ... 78
Qualitative Data ... 80
Interview Question 1: Based on your experiences, how does the lack of affordable housing affect the middle-income population in Abuja, Nigeria? .. 80
Interview Question 2: Based on your experiences, how does the Nigerian culture impact affordable housing and price of housing in Abuja?... 84
Interview Question 3: Based on your experiences, how does technological information exchange between stakeholders in Abuja result in availability of housing for the middle-income population? ... 87
Other Interview Questions ... 92
Interview Question 4. How do you feel about housing availability and affordability for the middle-income population?... 92
Interview Question 5: How would you describe financial institutions’ capacity to establish low-interest construction and mortgage loans to middle-income earners in Abuja? ... 93
Interview Question 6: How would you describe the private sector in relation to affordable housing? ... 93
Interview Question 7: How does communication in your organization improve housing availability or lead to affordability of housing for the
middle-income population? ... 93
Interview Question 8: How will an electronic marketplace provide information on housing to the middle-income population?... 94
Interview Question 9: How would you describe the effect of culture on governmental housing policies? ... 94
Interview Question 10: How would you describe culture with respect to housing within the private sector? ... 95
Interview Question 11: How would you describe partnerships and stakeholders in the housing market?... 95
Interview Question 12: What is your experience with housing accommodation in Abuja? ... 95
Quantitative Data ... 96
Saturation of the Phenomenological Study... 121
Themes ... 123
Presentation of Results by Research Questions and Themes ... 123
Research Question 1 ... 123
Theme 1: Lack of Affordable Housing... 124
Research Question 2 ... 125
Theme 2: The Nigerian Culture ... 125
Research Question 3 ... 126
Summary ... 131
Conclusion ... 132
CHAPTER 5: CONCLUSIONS AND RECOMMENDATIONS... 133
Overview of Chapters ... 133
Review of the Problem Statement ... 135
Responds to the Problem ... 135
Significant of Study to Leadership ... 136
Area for Future Study ... 139
Recommendations... 140
REFERENCES ... 143
APPENDIX A: QUESTIONNAIRE... 156
APPENDIX B: QUALITATIVE INTERVIEW QUESTIONS... 159
APPENDIX C: INFORMED CONSENT FORM ... 161
LIST OF TABLES
Table 1 Participants in the Study... 69 Table 2 Disproportionate Stratified Sampling... 73
LIST OF FIGURES
Figure 1. Collaboration of stakeholders. ... 35
Figure 2. General assessment test... 39
Figure 3. Participant age... 96
Figure 4. Bar graph – question 1. ... 97
Figure 5. Bar graph – question 2. ... 98
Figure 6. Bar graph – question 3. ... 99
Figure 7. Bar graph – question 4. ... 100
Figure 8. Bar graph – question 5. ... 101
Figure 9. Bar graph – question 6. ... 102
Figure 10. Bar graph – question 7. ... 103
Figure 11. Bar graph – question 8. ... 104
Figure12. Bar graph – question 9. ... 105
Figure 13. Bar graph – question 10. ... 106
Figure 14. Bar graph – question 11. ... 107
Figure 15. Bar graph – question 12. ... 108
Figure 16. Bar graph – question 13. ... 109
Figure 17. Bar graph – question 14. ... 110
Figure 18. Bar graph – question 15. ... 111
Figure 19. Bar graph – question 16. ... 112
Figure 20. Bar graph – question 17. ... 113
Figure 21. Bar graph – question 18. ... 114
Figure 23. Bar graph – question 20. ... 116
Figure 24. Bar graph – question 21. ... 117
Figure 25. Bar graph – question 22. ... 118
Figure 26. Bar graph – question 23. ... 119
Figure 27. Bar graph – question 24. ... 120
Figure 28. Bar graph – question 25. ... 121
CHAPTER 1: INTRODUCTION
Affordable housing for middle-income populations represents an important part of the basic infrastructure necessary in the development of nations (Akinwale, 2004;
Ibagere, 2002; World Bank Group, 2006). Ibagere noted that in the capital cities of developing nations, a “shortage of housing affects the middle-income population” (p. 3). One area known as the sub-Saharan African region had a population of over 600 million in 2004 and has continued to grow at a 10% annual rate (Taylor, 2000; White, 2005). The population was characterized by migrations from the interior regions towards cities because of socioeconomic pressures. As people migrated to the capital cities, housing prices increased, and the middle-income population could not afford housing (Al-Obaidan, 2002; Anugwom, 2001; Taylor, 2000).
In Abuja, the capital of Nigeria, only the rich can afford to purchase a home (Karley, 2003; Kenny, 2002; Le, 2002). Within the context of study, only the rich are referred to target population with an average yearly income of N185, 000, Naira, Nigerian currency ($1500 USD) (Akinwale, 2004; Ibagere, 2002; World Bank Group, 2006). Individuals with average monthly income of N12, 000 ($100 USD) or less are compelled to live in the city’s suburban areas (Al-Obaidan, 2002). A phenomenological qualitative study on affordable housing was explored through the middle-income population “inductive experience” (Devers & Frankel, 2000, p. 2). From the middle-income people perspective, impact of the Nigerian culture, inadequacy in economic infrastructures on affordable housing are explored and explained (Moustakas, 1994, Strong, Ringer, & Taylor, 2001; Wren, 1994).
Background of the Problem
Nigerian people reside in a land equal to the size of California and Arizona in the United States combined (Country Reports, Nigeria, 2004). The centrally located city of Abuja was founded in 1976 and recognized as the official Federal Capital Territory Authority (FCDA) of Nigeria in 1991 (Ayemi, 2001; Ojide, 2003). Abuja was initially designed to cover an area of 250 square kilometers. In reality, Abuja is geographically located in an area of 8,000 square kilometers and has an estimated population of over seven million as compared to Nigeria’s 140 million people (Country Reports, Nigeria, 2006; Ikejiofor, 1998). Nigeria is the largest country within the sub-African region with a combined population of over 600 million people in 2004 (Norris, 2001; Taylor, 2000). The World Bank Group (2003) has classified Nigeria as a poor nation. Regarding Abuja’s affordable housing shortage, White (2005) suggested that it might be due to the lack of disposable income of middle-income populations rather than an actual shortage of homes.
Nigerian gross domestic per capita income was estimated to be $1,000 USD (World Bank Group, 2006). Under the study, the middle-income population consisted of employees whose monthly wages or salaries average an equivalent of $100 USD or less, which was equivalent to 12,000 Naira, the Nigerian currency. For the middle-income population, two thirds of the monthly income was typically allocated to purchasing food and renting a single-family house that averages $25 USD. Financial institutions,
governmental agencies, and the private sector are all involved in the development of housing in Nigeria. In Abuja, Nigerian government allocated land for the construction of housing. Funds for housing are provided through financial institutions. The private sector builds homes. Functions of the financial institutions, governmental policies, and private
are interchangeable within the context of understanding affordable housing. Financial institution, governmental agencies, and the private sector are described as the
stakeholders (Cortright, 2001; Ekeogu, 2002; Mbeki, 1999).
A phenomenological qualitative research study explored a lack of affordable housing from the perspective of the middle-income population. An investigation into the lack of affordable housing in Abuja revealed that the supply of expensive houses exceeds the demand (Pindyck & Rubinfeld, 1989). Experts in strategic management indicated that leaders of financial institutions, governmental agencies, and the private sector strategies maintained high prices of homes in capital cities (Cascella, 2002; Gagnon & Michael, 2003; Mintzberg, Lampel, Quinn, & Quinn, 2003). Explored in the study are the middle-earners’ point of view regarding the effects of stakeholders’ (i.e., government, financial institutions, and the private sector) policies on affordable housing (DeSoto, 2000; Ibagere, 2002; Strong et al., 2001; Wren, 1994). Ibagere noted, “a lack of lower interest mortgage loans” (p. 3) explained how the supply of expensive houses exceeded the demand because many people could not afford housing.
Al-Obaidan (2002) studied 45 developing countries and posited that privatization of property reduced the inefficiencies inherent in public ownership. According to Al-Obaidan’s findings, individual ownership of property stimulates a nation’s economy. A deeper understanding of private property ownership as it affects the middle-income populations was necessary to explain the phenomenon of affordability of housing. DeSoto (2000) noted that allowing private ownership of real property might empower middle-income populations and improve economic conditions.
At the beginning of the 21st century, technology and its peripheral components have a role in the issue of affordable housing. Middle-income earners shared housing experiences regarding use of the internet while locating affordable housing. The internet usage and accessibility was not prevalent in the Nigerian housing market (Ahlawat & Ahlawat, 2006; Bayliss, 2002; Chowdhury, 2002). Information technology remained a vital component in the dissemination of housing profile materials to potential
homeowners (Afuah & Tucci, 2003; Dai & Kauffman, 2002). One goal of the present research study was to explain the role of the internet in locating affordable housing.
A centralization of information into a single internet server in Abuja was an issue relevant to the present research study. According to the minister and mayor of Abuja, El Rufai (2004), stated that the purpose of having only one centralized server was to chronologically enter titles of landowners into a centralized database. Centralizing information into the Federal Capital Territory Administration (FCDA) server could help the Nigerian middle-income population in locating affordable housing (Bowditch & Buono, 2001; Davila, Gupta, & Palmer, 2003). In a city such as Abuja, it could be
problematic to attempt incorporating the necessary technological components that lead to effective and efficient access to information about affordable housing (Ahlawat &
Ahlawat, 2006; Chowdhury, 2002; Le, 2002).
Statement of the Problem
The middle-income population cannot afford housing in Abuja, Nigeria, and a lack of affordable housing contributed to a specific socioeconomic problem (Ayemi, 2001). Karley (2003) maintained that “higher interest rates attached to [the] loans” (p. 27) granted to middle-income earners through financial institutions have resulted in a housing
shortage. Average income of Nigerians and the high interest rates applied to mortgages specifically relate to the problem of the shortage of affordable housing (Ayemi, 2001; Karley, 2003).
Shortage of housing for middle-income earners was an issue during Nigeria’s authoritarian military leadership from 1970 to 1999 (Akinwale, 2004). In the first decade of the 21st century, the situation has not changed, and middle-income earners are still unable to locate affordable accommodations. Within the socioeconomic context, a lack of affordable housing is attributed to the macroeconomic approach in the management of the country (Akpan, 2003; Ayemi, 2001). Aderibigbe (2002) noted that Nigerian
governmental policies from the 1970s to 2002 might have overlooked the core issue of affordable housing as it affected the middle-income population. Akinwale noted that the previous authoritarian governmental leaders overlooked the problems and the effects of affordable housing on the middle-income population in Abuja.
A qualitative design was appropriate for a phenomenological study. Explored in this study was the impact of affordable housing and housing shortage in Nigeria from the perspective of middle-income populations (Creswell, 2002). Ten middle-income earners from financial institutions, governmental agencies and the private sector were
administered with semi-structured in-depth questions. There was face-to-face and paper generated interviews that followed the phenomenological approach to qualitative
research. Questions were elicited from the participants’ perceptions regarding individual experiences of the phenomenon of unaffordable housing.
A quantitative questionnaire that consisted of 25 questions constructed with a 5-point Likert-type scale (see Appendix A) supported the qualitative responses from the
participants. Purpose of the questionnaire was to obtain (a) demographic information from the participants and (b) responses to questions about housing availability and affordability. Data from the survey questionnaire helped supported the qualitative interview data. Interviews and the survey were administered sequentially.
Moustakas (1994) explained that the experiences of the population under study might include subjective elements; internal validation became necessary through saturation of data. As part of the analytic process, the modified van Kaam methodology was used (Moustakas, 1994). A qualitative, phenomenological interview continued only as long as participants provided new and relevant information. Devers and Frankel (2000) noted that the qualitative research process is nonlinear and nonsequential. There were three core qualitative open-ended questions. A phenomenological study described and interpreted the experiences of middle-income earners regarding access to housing (Neumann, 2003; Simon, 2006).
Purpose of the Study
A lack of affordable housing was explored through the perceived experiences of the middle-income populations. A qualitative methodology and a quantitative survey questionnaire described and explained the lack of affordable housing as it affects middle-income earners. Qualitative research methodology was appropriate because of the nonlinear and nonsequential method of gathering data. Study was based on the
perceptions of a phenomenon consciously experienced by middle-income populations. Data were collated from the financial institutions, governmental agencies, and the private employers. Stakeholders employ 90% of the middle-income earners in Abuja
interview. Survey questionnaires were administered to 30 individuals in Abuja (Creswell, 2002; Neumann, 2003; Simon, 2006).
Why the middle-income population is unable to afford housing in Abuja was explained in the study. Explored in the study was potential association between the lack of affordable housing for middle-income earners and the city’s infrastructure
development (Bowditch & Buono, 2001; Newan, Ridenour, Newman, & DeMarco, 2003). Specific group affected were the middle-income earners who live in Abuja and the suburban areas within the city (Akpan, 2003; Ayemi, 2001). The study was conducted in Abuja. Abuja has a population of over seven million and where 90% of the middle-income population is unable to afford housing (Ikejiofor, 1998). According to the Nigerian Minister of Housing, 16 million housing units are needed in Nigeria (Country Reports, Nigeria, 2004).
Significance of the Problem
Currently, significance of study was to discover a potential association between the lack of affordable housing and the policies that controlled the development of the nation’s infrastructure. Ibagere (2002) noted that affordable housing represents a vital resource within a nation’s economy, especially in a developing country such as Nigeria. A lack of affordable housing could significantly impact the socioeconomic status of the middle-income population in capital cities within the sub-Saharan African region (DeSoto, 2000; Wren, 1994). In the socioeconomic context, the study explained the consequences of stakeholders’ policies regarding affordable housing (Boswell & Cannon, 2005). The study provided valuable information to the leaders of financial institutions and the private sector, and to the middle-income population in Nigeria.
Significantly, the study affected stakeholders’ working synergies and the
leadership styles. Leaders of the financial institutions, government agencies, and private sector might begin to work together to develop strategic to the housing shortage affecting middle-income populations. Stakeholders might come to view the lack of affordable housing through the prism, themes, patterns, revelations, and experiences of the middle-income population (Boswell & Cannon, 2005; Wolverton, 2003).
Finally, the study might provide valuable benefits in raising awareness regarding the use of technology to disseminate information about housing availability in Abuja (Bass, 1990; Bernstein, 1996; Wren, 1994). Dissemination of information on housing would benefit the middle-income population. With technology and the use of the internet, leaders in Nigeria would become better informed on affordable housing and the impact on the socioeconomic life of the country (Akpan, 2003; Huang, Chang, & Yu, 2006; Strong et al., 2001; Wolverton, 2003).
Significance of Research to Leadership
Significance of the study was to inform Nigerian leadership of the phenomenon of a lack of affordable housing (Bass, 1990; Wren, 1994). First, the study explained the role of financial institutions regarding the lack of affordable housing for the middle-income population in Abuja. Explored in the study, were practices of banks creating a centralized server with the Central Bank of Nigeria (CBN) to verify credit, condition, capacity, collateral, and conditions for potential loan applicants. The CBN server could be linked to the existing Federal Capital Territory Authority (FCDA) server.
Second, a goal of the study was to demonstrate to the leadership of Nigeria the importance of governmental agencies working with the private sector on the issue of
affordable housing. Last, the International Monetary Fund, the World Bank Group, Habitat for Humanity, and the United Nations Educational, Scientific, and Cultural Organization (UNESCO) could benefit from the study and help raise awareness of the socioeconomic problem of housing in developing nations. For example, the World Bank Group could assist leaders of developing nations in reducing housing shortages by channeling economic aid through housing programs. Similarly, Habitat for Humanity could provide low-interest construction loans and build affordable homes for middle-income earners in developing nations (Habitat for Humanity, 2005). The International Monetary Fund could financially assist stakeholders in Abuja, Nigeria.
Nature of the Study
A phenomenological research design was applied in the study. Application of the research design allowed individuals to explain the effect of a lack of affordable housing in Abuja. A phenomenological qualitative research design was appropriate (Newan et al., 2003) to obtain first-hand accounts of the phenomenon of lack of affordable housing for middle-income earners. A quantitative survey questionnaire was appropriately used to complement the qualitative open-ended questions. Instrument used for the study was a modified van Kaam method by Moustakas (1994). A lack of affordable housing from the point of view of the middle-income population was explored in the study. Cooper and Schindler (2003) noted that a researcher begins with a description of the paradigm under study and follows with a secondary exploration through “gathering literature materials with data that are already available” (p. 152) in scholarly journals and peer-reviewed literature. Paradigm under study resulted in the documentation of data from the lack of affordable housing for middle-income populations. The data analyzed were based on the
experiences of the respondents which indicated the main issue was middle income population’s capacity to afford housing. The analyses revealed that it would be impossible for middle-income population to afford housing in the capital city without some form of housing subsidy.
Creswell (2002) recommended a triangulated design to analyze contrasting points and gain multiple perspectives that could be used to response or refute research questions. Data for analysis comes from (a) a survey of 25 questions on a 5-point Likert-type scale administered to a target segment population in Abuja, (b) semi-structured
phenomenological interviews conducted with the same population, and (c) a review of relevant literature. Neumann (2003) noted that survey instruments administered to respondents could structurally lead to conceptualization, and the refined concept could then become a theoretical framework.
Middle-income employees from financial institutions, governmental agencies, and the private sector were the sample for the study. The middle-income population’s place of employment and income as well as the ability of employers to provide housing subsidies was part of the criterion used in the sampling process. To understand the underlying mitigating factors that would decrease the housing shortage remained core to the study (Amit & Zott, 2001).
An overlapping similarity exists between quantitative and qualitative research methods (Creswell, 2002). A qualitative research method addresses the themes and the generalizations under study (Neumann, 2003). Themes in the current study were
generated from interviews with three open-ended questions conducted with participants in Abuja (Creswell, 2002). Quantitative research methods condense data with precise
measurements. In a questionnaire constructed with a 5-point Likert-type scale, the respondents rated their degree of agreement with specific statements which reflected various themes relevant to housing shortages and housing affordability. Quantitative research methods are typically used to analyze relationships between dependent and independent variables (Simon, 2006). Data gathered for study were not quantified or validated through any causal relationship. For this study, data collated in the quantitative statistical analysis supported and complemented the participant’s responses from the qualitative interview questions.
Primary data gathered in the proposed qualitative research explained the effects of a shortage of affordable housing on middle-income earners. In a phenomenological research, qualitative design was appropriate to discover the central themes, patterns, and constructs of the target phenomenon. A survey consisting of 25 questions on a 5-point Likert-type scale was used to obtain information on the central themes to complement the participant’s responses from the qualitative questions. Nuances within the middle-income population’ inductive experience affected the study findings, so there was careful
interpretation of the data (Creswell, 2002; Neumann, 2003). Research Questions
A phenomenological qualitative research study explored the lack of affordable housing from the experiences of the middle-income population. Research questions focus exclusively on the experience of participants or were developed through certain avenues that reconstructed a particular situation (Creswell, 2002). Exploring the common
experiences of middle-income earners, shared culture, and how the shortage of housing impacts individual lives was primarily a qualitative design approach. Research questions
focus on the housing shortage and the ability of the middle-income population to afford housing. Qualitative research questions are open-ended questions rather than specific or close-ended questions (Charmaz, 2006). The following research question guided the study: how does the lack of affordable housing affect the middle-income population in Abuja?
Theoretical Framework
Theoretical framework of the proposed research study was based on stakeholder and socioeconomic theories. Friedman (as cited in Beauchamp & Bowie, 2004) noted, “the social responsibility of stakeholders is to increase profit” (p. 50). Stakeholders (i.e., government, financial institutions, and the private sector) objective centered on profit maximization. Profit maximization without understanding and addressing the societal problem of lack of affordable housing for the middle-income population would not lead to good social responsibility amongst stakeholders. Therefore, stakeholders’ theories became crucial to the underlying conceptual framework of the study.
Fisher and Urich (1999) posited that all stakeholders must benefit from
meaningful social programs. In the Philippines, for example, the government benefited through reduction of the overall costs of waterborne infections. The private sector reduced costs through eradication of water problems for the middle-income employees, (1) the financial institution benefited through government granted tax incentives and (2) capping the profit margin attached to loans granted to various villages for the supply of water (Fisher & Urich). Fisher and Urich’s sociological philosophy on stakeholder theories guided study. The government, financial institutions, the private sector, and
subsequently, the middle-income population would benefit potentially from successful social programs in Abuja.
Pertinent to the current study was Maslow’s (1943) theory of the hierarchy of needs. According to Sumerlin (1997), Maslow constructed the theory of self-actualization in 1954. Maslow further expanded on the robustness of his theory in 1968, 1970 and 1971, and later included the five steps to self-actualization. Included in the steps were series of achievements before reaching the stage of self-actualization: the physiological, safety, love, and esteem need’s comes before the optimal need of self-actualization (Sumerlin).
Maslow’s theory consists of satisfying the physiological, safety, love, and esteem needs before self-actualization can occur. Definition of self-actualization is the instinctual need for people to make the best of self-abilities and strives to be the best (Sumerlin, 1997). Maslow’s theory consists of satisfying the physiological, safety, love, and esteem needs before self-actualization can occur. Middle-income populations in Abuja would not strive to be the best without resolving the issues of housing. Paramount to the study, housing for the middle-income population leads to self-actualization. Without housing for the middle-income population, the physiological, safety, love, and esteem needs might not be met (Sumerlin).
Within the private sector, the lack of affordable housing for the middle-income population was the phenomenon under study. Herzberg’s (1964) motivation-hygiene concept will be used as a theoretical backdrop to describe the lack of affordable housing for private sector employees. Based on Herzberg’s hygiene theory, middle-income employees perform at an optimum capacity, and a lack of affordable housing was
inextricably intertwined with daily functions (Chowdhury, 2002). Paradoxically, Nigeria is classified as a poor nation, yet rich in oil and natural resources (World Bank Group, 2006). From the perspective of the middle-income population, housing subsidies or lower interest rates might be the means to affordable housing.
As a result of the study, the expectation was for the Nigerian government leadership to adopt new housing policies. In the expectancy theory, Mangelsdorff (2001) noted a particular governmental effort might lead to a particular first-level outcome such as explaining the issues of housing shortage. Turner (2002) maintained that the punctuated equilibrium model (i.e., a theory of evolutionary biology applied to social and political contexts to explain sudden changes in policy after long periods of inaction) could be applicable to bureaucratic governmental policies that might result in a short-term radical change in the housing industry.
Definition of Terms
This study explored the lack of affordable housing from the point of view of the middle-income population. Definitions of terms to clarify ambiguities resulting from potential misinterpretation of underlying meanings are discussed. Terms and phrases used in the study are defined as follows:
Affordable housing. Means the ability of the middle-income population to purchase a single-family residence (Akinwale, 2004).
Central Bank of Nigeria (CBN). The institution responsible for monetary and fiscal policies in Nigeria as well as policies affecting construction and mortgage loans granted, by other financial institutions (Aderibigbe, 2002).
Certificate of occupancy. A deed of trust on land that means the land is free from encumbrances (El Rufai, 2004).
Decrees. Decrees are enacted in Nigeria to facilitate and to help implement government programs. These decrees cut across bureaucratic processes in facilitating the actions of the government (Akinwale, 2004).
Electronic marketplaces. In electronic marketplaces, intermediaries are eliminated from transactions, and sellers and buyers exchange goods and services for a fee and payment (Nigerian National Information Technology Development Agency, 2002).
Federal Capital Development Authority (FCDA). The FCDA monitors housing units in Abuja (El Rufai, 2004).
Federal Housing Authority (FHA). The FHA is responsible for the construction of new houses in Abuja. The FHA grants loans up to 50% to homebuyers with interest rates ranging from 11% to 15%. The 50% deposit has to be in cash. The FHA in Abuja is responsible for the implementation and compliance of governmental housing policies in Abuja (Anugwom, 2001).
Financial institutions. The banks, mortgage companies, and other quasi-banks in Abuja that grant construction and mortgage loans to middle-income earners (Obadan, 2002).
Godfatherism. In Nigeria, lower-level employees often bypass immediate managers due to influence from a top executive. Employees’ in similar situations received a higher position because of a relationship established with the top executive. Top executives mentoring lower-level employees are different (Brown, 2004).
Horizontal Integration: Means those financial institutions with similar interests, compositions and method of operations forming partnerships to granting loans to potential middle-income applicants.
Infrastructure. Electricity to support the internet, extranet, and intranet
connectivity to independent server protocols (Adenikinju, 2003). The infrastructure also includes effective electronic communication among stakeholders, the supply of constant electricity, and enabling environments for the use of technology in Abuja.
Middle-income earners. Middle-income earners in Nigeria earn an average of $100 USD monthly although the amount can vary greatly and depends on whether or not the employer is a governmental agency, the private sector, or a financial institution. The $100 USD reflects cost and standard of living of the people in Abuja (Country Reports, Nigeria, 2004).
Middle-income population. Average income in Abuja depends on location, the nature of a job, and the agency or the employer; the average monthly middle income is estimated to be $100 USD (Ibagere, 2002; World Bank Group, 2006).
Ministry of Works and Housing Nigeria. The ministry responsible for construction of roads, governmental offices, and housing for government middle-income earners (Aderibigbe, 2002).
National Housing Policies (NHP). The organization responsible for the
construction of housing units in Nigeria. Significance of the NHP was apparent during the creation of Abuja. NHP was created and promulgated through Decree Number 53 of 1989. The intention of the decree and the establishment of NHP were to formulate
cohesive housing policies that would lead to housing accommodation for middle-income earners (Ibagere, 2002).
Naira. Nigerian official currency. The Nigerian currency exchange at 125 naira to one dollar (World Bank Group, 2006).
Private sector. Private enterprises or organizations located in Abuja that also conduct business globally (Ibagere, 2002).
Synergies. These are combined efforts of financial institutions, governmental agencies, and the private sector in reducing the housing shortage or creating affordable housing for the middle-income population in Abuja rather than one entity trying to solve the problem alone (Akinwale, 2004).
Vertical Integration: Refers to external financial institutions, agencies,
foundations, and world organizations with similar interests in reducing housing shortages in alignment with local Nigerian institutions or governmental agencies to granting low interest loans to middle income populations.
Working synergies. According to Post, Preston, and Sachs (2002), working synergies of the stakeholders are timeliness of communication, honesty, completeness, empathy, and equity of treatment by the managerial leadership.
World Bank Group. The World Bank Group consists of 184 member countries of the International Bank for Reconstruction and Development and the International
Development Association responsible for providing financial and technical assistance to developing countries. World Bank groups provide low-interest loans and grants to developing countries for housing and other infrastructure (World Bank Group, 2006).
Assumptions
Study explored the lack of affordable housing through the perceptions of the middle-income population. Employees in governmental agencies, financial institutions, and the private sector participated in the research. An assumption for the study was respondents would provide honest and credible information during the process of administering the qualitative interview questions.
Limitations
Participation in the study was limited to individuals who agreed to participate voluntarily. The study was limited to the number of subjects interviewed and the amount of time available to conduct the research. Generalizability of the study was limited to middle-income families in Abuja, Nigeria. Finally, the study was limited by the validity and reliability of the instruments used.
Delimitations
Explicitly, focus of the study was limited to the middle-income population’s capacity to afford reasonable housing in Abuja. Other cities in Nigeria are excluded from study. The scope included affordable housing for the population under study and the housing industry in Abuja. Participants were governmental employees, staff at financial institutions, and employees within private organizations (Jones, 2003; Kacena, 2002).
Summary
A lack of affordable housing through the middle-income population perception was explored in this study. A phenomenological qualitative study explored how the lack of affordable housing affects middle-income earners. Chapter 1 began with an
purpose, significance, nature of study, and research question. Research question that guided the study was: how does the lack of affordable housing affect the middle-income population in Abuja? A modified van Kaam method by Moustakas (1994) was used to analyze and synthesize responses from the qualitative questions posed to participants.
A section of the chapter included an overview of theoretical frameworks.
Paradigm under study was the middle-income population capacity to afford housing near places of employment. A lack of affordable housing by middle-income population was interlinked to the nation’s infrastructure and the policies that dictated its development. The governmental agencies, financial institutions, and the private sector are stakeholders within the phenomenon of shortage of affordable housing. Houses are available and might remain vacant because only the rich can afford housing in Abuja. Chapter 2 will provide a review of the literature on the socioeconomic and stakeholder issues involved in the topic of interest.
CHAPTER 2: REVIEW OF THE LITERATURE
A lack of affordable housing from middle-income population’s perspective was explored in this study. Purpose of the phenomenological qualitative study explained how a lack of affordable housing affects the middle-income population in Abuja. Chapter 2 starts with an overview of germinal theories about stakeholders. Literature for the study was presented with the following subdivisions: (a) documentation of searches, (b) overview of theoretical frameworks, (c) literature on affordable housing for the middle-income population, (d) governmental policies, (e) stakeholder theories, (f) private sector, (g) electronic marketplaces, (h) communication, (i) literature on culture, (j) summary and conclusion.
Documentation
Materials for the study are documented and would be saved in a bank volt for three years. After three years, the materials will be destroyed. Materials used in the study were from scholarly journals, texts, and scholarly manuscripts. Literature materials on stakeholder theories were downloaded from the electronic libraries. EBSCOhost research database provided 9,000 articles, of which 7,000 were peer-reviewed articles, and 53 of the peer-reviewed articles were used in the study.
Research material on stakeholder theories regarding housing development and financial institutions in Nigeria were difficult to find. The internet provided information regarding housing availability and affordability in Abuja. In Nigeria, housing
development information was used to corroborate information gleaned from financial institutions. Nigeria’s national web site provided information on stakeholder theories, leadership issues, and leadership styles.
Another area of macroeconomic literature materials that proved difficult to locate electronically was literature on the terminology middle-income population, nebulously defined, and what it means to different segments of the population. One developing nation interprets the phrase middle-income population differently from another
developing nation. Literature materials regarding middle-income earners were difficult to research due to the disparity in economics and the standard of living used as a benchmark in defining the middle-income population in Abuja. Macroeconomic indicators suggested different formulas of classifying and defining the middle-income population (World Bank Group, 2003).
Theoretical Framework
Germinal socioeconomic theories of Maslow (1943) and Smith (1776/1976b) guided the analysis. Housing shortages or a lack of affordable housing for middle-income earners in Abuja was the social economic phenomenon explored in the study. Maslow’s theory was important to the proposed study. Maslow constructed the theory of self-actualization in 1943 (Sumerlin, 1997). In the theory, physiological, safety, love, and esteem needs come before the optimal need of self-actualization. Central in the review of the literature for the study was the first level of Maslow’s theory, which related to 90% of physiological needs of the middle-income population. Physiological needs are related to the 90% of the population in Abuja that are unable to meet the basic necessity of the housing (Country Reports, Nigeria, 2006; Ikejiofor, 1998).
Focus of the investigation was affordable housing that was the physiological needs for units of study. Matteson and Ivanevich (1999) noted that Maslow’s
basic necessity for all populations. In Abuja, the middle-income earners are particularly affected by the lack of affordable housing near places of employment. If the middle-income earners’ needs are not met, the next level of Maslow’s pyramidal hierarchy of needs was difficult to reach. Low-interest construction and mortgage loans to middle-income earners through financial institutions were means to offer middle-middle-income earners a level of safety.
Trigg (2004) claimed that Maslow’s pyramidal hierarchy of needs is not a scientific, clinically researched, and empirical study. Trigg contended that human needs are insatiable, and Maslow’s pyramidal hierarchy of needs does not reflect the reality of human needs nor, according to Hanley and Abell (2002), do human needs occur in the order of Maslow’s pyramidal sequences. Some individuals give priority to better pay, transportation, and healthcare benefits instead of affordable housing.
Herzberg’s (1964) motivation-hygienic theory consisted of the “motivators and the factors that lead to dissatisfaction at work also known as the hygienic factors” (Wren, 1994, p. 333). Two aspects of the theory deals with motivation, such as better work environment, better vacation rather than increased employee’s salary, and the hygienic aspect of the theory that deals with internal motivation. Employees with reasonable accommodations may produce better in a place of work (Wren). In the theory, incentives such as housing, vacation, a better work environment, better healthcare to employees could lead to higher productivity rather than increased salary. Motivators in the theory relates to the possibility of employers conjecturally providing housing for employees. Employers who inculcates housing scheme for employees increased productivity (Wren).
A review of Herzberg’s (1964) hygienic factors pointed to the motivational aspect of employers in providing housing to middle-income employees. Housing incentives as a motivator for employees lead to an increased in productivity and employee retention. In the context of Herzberg’s theory, housing incentives for middle-income earners have more importance than other hygienic factors such as achievement and recognition. Furthermore, DeSoto (2000) posited that the policies for mortgages and construction loans are crucial factors in explaining the lack of affordable housing in Nigeria.
DeSoto (2000) explained “the mystery of capital [and noted the reason] why capitalism triumphs in the West and fails everywhere else” (p. 1) is that mortgage rates and construction loans have been granted to middle-income earners in developed nations over many generations, and the funds continued to circulate through the system.
Conversely, in developing countries, the lack of borrowing power for the middle-income population has led to a lack of housing infrastructure and socioeconomic hardship. As noted in Matteson and Ivanevich (1999), Maslow’s theory of self-actualization supports DeSoto’s theory that explains the importance of mortgage and construction loans for the middle-income earners (as cited by Wolverton, 2003). Wolverton contended that without construction or mortgage loans, developing nations remain poor due to an inadequate infrastructure. Wolverton noted that the middle-income population and small businesses sustain the capitalistic economy in developed nations. Another reason housing shortages might persist in developing nations was that financial institutions grant defunct loans (i.e., loans that a bank cannot afford to make and that lead to the bank’s closure).
Wolverton (2003), in reference to DeSoto (2000), explained that capitalism fails in developing nations because of inefficiency and overly inflated prices attached to
housing. Wolverton further noted that capitalism fails in developing nations due to financial institutions overpricing and overfunding. Wolverton noted that loans and mortgages attached to residential properties do not reflect accurate appraisals of the properties. Consequently, defunct loans have resulted in the liquidation of some financial institutions in Nigeria.
Liquidation of financial institutions resulted in a complex chain of events that placed enormous pressures on the economy and the market forces in Abuja. Numerous events that led to the breakdown of the Nigerian economy occurred in other developing nations (Osili, 2004). According to Osili, the strain on Nigeria’s economy because of bank failures resulted in financial distress to the financial market despite Nigeria’s substantial oil and natural resources.
Housing for the Middle-Income Population
Ibagere (2002) noted that the Nigerian governmental bureaucracy was responsible for the lack of affordable housing for the middle-income population in Abuja. According to Ibagere,
[housing represents] an important sector of the economy and an index of its economic advancement, prosperity, and investment in real estate development. Housing remains a major contributor to the physical assets of a nation. Mass housing represents shelter provided for the masses—the greater part of the people in a nation. (p. 1)
Ibagere (2002) maintained that Nigerian governmental bureaucracies stifle the housing market for the middle-income population. Bureaucracy prevented middle-income earners from owning homes. Ibagere contented that bureaucracy explained how various
decrees on housing policies did not ease housing shortages or improve affordable housing in Abuja.
Ibagere (2002) contended that past military governments promulgated housing decrees that were policies burdened by bureaucracy failed to improve the housing situation. Present Nigerian leadership might be open to addressing the concerns of a lack of affordable housing (El Rufai, 2004). Presently, for example, a centralized server partially maintains data regarding housing owned by individuals in Abuja (El Rufai, 2004). In Nigeria, government allocates land and financial institutions funds the private sectors in building housing for the middle-income earners, and these programs are still at the infancy stage (El Rufai, 2004).
Weber's bureaucratic theory explains how "differences in authority were based on differences in the beliefs by which legitimacy is attributed to an authority relation" (As cited by Scott, 2003, p.44). In developing nations, bureaucracy create situations were the majority of the population tends to gravitate towards the leader in authority (Ferraro, 2002). In developing nations, the leaders’ shortcomings are conjecturally legitimatized. In Nigerian, for example, people sought special favors from leaders in order to by pass the bureaucracy association with land allocations. The Nigerian leaders in return, would only allocate land for building houses to people of interest (Brown, 2004).
According to Brown (2004), bureaucracy in Nigeria has led to the problem of godfatherism. Land allocations in Abuja are assigned to people due to influence and connection to authority. Brown claimed that part of the Nigerian bureaucracy system could explain why housing shortage exists. Scott (2003) asserted that Weber’s
bureaucratic theory, in which economic and sociological concerns are juxtaposed, could possibly be intertwined to the problems of housing shortage.
In Nigeria, financial institutions’ expediting applicant’s home loan package explained how individuals navigate through the bureaucracy by appeasing the authority (Brown 2004). In the private enterprise, employers’ encountered how bureaucracy inhibits capacity to build homes. Matteson and Ivanevich (1999) noted that Weber’s typology advocated that “control is an efficient element in the efficient functioning enterprise” (p. 131). Weber’s agenda for bureaucracy is also sociological. The Nigerian leaders legitimized authority to control how land allocation is distributed to the middle-income population. Explanation of housing shortages in Abuja relates to the sociological aspect of understanding how people in authority allocate land to the middle-income populations.
Matteson and Ivanevich (1999) noted that Weber’s typology advocated that “control is an efficient element in the efficient functioning enterprise” (p. 131). Weber’s agenda for bureaucracy is also sociological. Explanation of housing shortages in Abuja relates to the sociological aspect of understanding how people in authority allocate land to the middle-income populations.
Matteson and Ivanevich (1999) explained that Weber’s theory is based on an analysis of bureaucracy in the developmental sense. Weber’s bureaucracy is
characterized by the existence of charismatic, traditional, and rational–legal types of authority. Alternatively, if the leaders in Nigerian adopt the leadership traits advocated by current study, perhaps the middle-income population could own homes.
Weber’s particularistic authority diffuses linear structures embedded in the system and consequently tends to impede change in organizations. Contextually, Weber’s
particular bureaucratic structure might compound the shortage of affordable housing for the middle-income population. A lack of affordable housing for middle-income earners in Abuja might be tied to a particular bureaucratic system that does not provide the means to reduce housing shortages in Nigeria.
Akinwale (2004) offered insight regarding issues of housing shortages and affordability that result from failed governmental decrees. The past Nigerian military government enacted but did not enact decrees to ease housing problems. Akinwale noted,
the housing shortage for the masses resulted in the creation of the National Housing Fund (NHF) under the policy of decree number 53 of 1989, decree number three of 1992, and federal mortgage bank degree number 82 of 1993; these decrees were to help facilitate the loans for the low-income people. (p. 5) Nigerian military governmental decrees failed to address the effects of a lack of affordable housing for the middle-income population because the decrees were not implemented (Akinwale). Akinwale maintained that the actions of the military leaders through the formulation of decrees did not enhance and encourage collaboration and formation of partnerships among stakeholders in the housing industry.
Governmental Policies
Governmental policies reflected on the Nigerian leadership styles and ingrained culture that explained reasons for the lack of affordable housing (Bowditch & Buono, 2001; Schein, 2004). For instance, the Nigerian Minister of Housing and Urban Development indicated that 16 million housing units are needed in Nigeria (Country
Reports, Nigeria, 2004). The Nigerian government leadership was assumed to have put in place initiatives that could help mitigate the lack of affordable homes for the middle-income population. Leadership styles that inhibit affordable housing remain either authoritarian or transactional (Akinwale, 2004).
Bass (1990) noted, “Authoritarian leaders depend on power and ability to coerce and persuade” (p. 419) people to carry out goals. Past authoritarian leadership styles of the Nigerian government and the lack of enactment of housing decrees negatively affected the middle-income population (Akinwale, 2004). Bass posited that the transactional leadership style lies between the transformational and the authoritarian approaches. Currently, leadership style practiced by the government in Nigeria in the early 21st century can be described as transactional (Bass, 1990). With an effective leadership style, leaders in Nigeria could persuade and inspire stakeholders to collaborate in addressing housing issues affecting the middle-income populations. Conjecturally, transactional leadership style has not produced such collaboration.
Stakeholders’ collaborative efforts were inhibited by the Nigerian housing policies of 1994 (Ibagere, 2002). The National Housing Policies organization was to produce over 121,000 new housing units for Nigerians. Private financial institutions, individuals, states, and governmental agencies, namely the Ministry of Works and Housing and the Federal Housing Authority (FHA), were expected to develop
partnerships. Past military leaders’ policies could not encourage affordable housing for the middle-income population because of the authoritarian leadership and practices in Nigeria (World Bank Group, 2000). Although the government was expected to subsidize housing, stimulate infrastructure development and provide inexpensive land, none of the
goals were achieved. Partnerships between the private sector, government agencies, and financial institutions failed. For instance, government employees were able to resell to private parties at highly marked-up prices the inexpensive pieces of land received (Ibagere, 2002).
According to the World Bank Group (2000), home ownership ratios have been between 20% and 40% of the total population of over 135 million people in Nigeria. Financial institutions’ inability to grant low-interest loans to middle-income earners possibly results in the lack of affordable housing in Abuja. Middle-income population’s inability to access low-interest loans through banks explained the lack of affordable housing that severely affects the population. Economic infrastructures needed to provide loans to the middle-income population are not in place (Ayemi, 2001). Strong
infrastructures create an environment conducive to Nigeria’s overall development. Democratic leadership of Nigeria was established in 1999. Recapitalization of a minimum deposit of 25 billion naira ($185.2 million USD) required by the CBN in December 2005 could have led to the formation of stakeholders’ partnerships and produced affordable housing in Abuja (Nigeria Central Bank, 2005). According to the FHA’s housing policy (Country Reports, Nigeria, 2004), financial institutions required the middle-income population to deposit 50% of the total purchase price for a house and pay the balance in a 5-year amortization period. Interest rate on the mortgage balance ranges from 11% to 13% amortized over 5 years.
Bukley (as cited in Bass, 1990) posited that a successful democratic leader is “a person who crystallizes on what the people of his or her country need or desire and illuminates the rightness of desires by effectively coordinating and achieving the stated
objectives” (p. 23). Democratic leaders in Nigeria are not willing to formulate housing policies that meet the needs of the middle-income population. If the leaders are not properly educated about the importance of affordable housing in relation to the nation’s economy, Nigerian leaders would continue to prevent the creation of effective policies.
Ibagere (2002) claimed the lack of improvement in the affordability of middle-income housing is due to governmental bureaucratic policies. Scott (2003) maintained that when Weber’s bureaucratic system is used, it leads to the creation of a particular type of structure that could impede housing affordability. According to Ibagere, decrees promulgated by the Nigerian leadership and governmental policies to ease the housing shortage failed due to the structure of the Nigerian system. Brown (2004) noted that policies in Nigeria are continuously undermined due to the practice of favoritism, nepotism, and tribalism. Housing shortages were to be abated by the Nigerian
government. Reasonably, abatement of housing shortages was not within the scope of the present research. Reasonable efforts from the Nigerian government leaders should
expectably lead to a reasonable positive outcome, and the efforts may be embedded in the expectancy theory (Mangelsdorff, 2001).
According to expectancy theory, a probability exists that a particular
governmental effort will lead to a particular first-level outcome (Mangelsdorff, 2001). Nigerian leadership was expected to promulgate housing decrees and make conscientious efforts in implementing the decrees. Past Nigerian governmental efforts could continue to affect the actions of stakeholders. For example, the past Nigerian government efforts to implement housing policies through housing decrees were not effective (Ibagere, 2002). The Nigerian housing decrees are still embedded in the process of individuals acquiring
land in Abuja despite technological innovative methods currently being adopted (El Rufia, 2004). Actions through governmental efforts illustrated that subsidization of housing and granting low-interest loans to the middle-income population failed. Government agents or employees might still be undermining conscientious efforts advanced by the Nigerian leadership. To ease the housing shortage, the new democratic government should formulate realistic and practical plans. Such plans could eliminate bureaucratic measures that prevent financial institutions from granting low-interest loans payable over a reasonable number of years (Ibagere, 2002).
The invisible hand theory (Smith, 1776a, 1776b) explained how governmental actions and policies might indirectly be affecting the economy of a nation. The
government of a nation may for instance enact housing policies to enhance housing policies for the middle-income earners. By contrast, the actions of the government were contrary to the policies. Nigerian leadership’s actions conjecturally hindered
implementing the housing policies from proposal to fruition. In Nigeria, the actions and policies of the government in relationship to housing affected housing. If change does not occur within the Nigerian government, the economy of Nigeria will continue to be
negatively affected. Government employees’ actions can be said to illustrate the invisible hand theory of Adam Smith (1776/1976b).
Edna (1997) analyzed the historical foundation of the invisible hand theory credited to Smith (1776/1976b). According to Edna, David Hume and Adam Ferguson (as cited by Edna, 1997) should be credited with the philosophical foundation of the invisible hand theory, along with Smith. Edna posited the invisible hand theory was a result of Hume and Ferguson “stumbling upon establishments, which are indeed the
result of human actions, but not the execution of any human design” (p. 187). Smith was credited with elaborating the theory and coining the phrase invisible hand (Edna, 1997, p. 1). Smith’s invisible hand theory might be used to explain the Nigerian government’s actions with respect to housing for the middle-income population. By omission or by design, housing shortages or a lack of affordable housing exist in Abuja.
Smith (1776/1976b) posited, “The rent which goes to support the vanity of the slothful landlord, is all earned by the industry of the peasant” (as cited by Edna, 1997, p. 35). Elliot (2000) maintained that Smith’s (1776/1976b) interpretation of rent collection by landlords is inextricably linked to poverty associated with the middle-income
population. Subsequently, the doctrine of rent collection from the middle-income population in Abuja, when extrapolated from Smith’s theoretical construct, explained how a lack of affordable housing exists for the population under study. Suggestively, if the middle-income population cannot afford to rent, substitution for mortgage payments would be impossible.
Samuelson’s (1961) theory of nonsubstitution of price is also applicable to the current study (as cited in Garegnani, 1983). Substitution theory stated that a middle-income population sees no rationality in substituting rent payments with mortgage payments for home ownership without an increase in income if renting was still possible. In the private sector, one can surmised that when wages increased, middle-income earners would prefer owning homes rather than renting, within the context of the current theoretical framework. Middle-income population would prefer to use the opportunities coming from an income increase to obtain healthcare benefits instead of affordable
homes. Alternatively, the middle-income population considered a marginal income increase an incentive to provide more food for the family rather than to own a home.
Ricardo (1961) offered that a determinant of housing demand and supply is the sustainable equilibrium price over a period. Ricardo described effective demand theory as people’s ability to pay for particular goods and services at a point in time. Middle-income population’s ability to pay for housing, irrespective of the availabilities and vacancies was explained within the stakeholders’ working synergies. Smith (1776/1976b) stated that the ability to pay is determined by the price. Ability to pay is also determined through the invisible hand of the Nigerian government. According to Klein (2003), Smith’s (1776/1976a) revealed the invisible hand of the government might lead to both negative and positive economies of scale. The invisible hand of the Nigerian government in formulating housing policies led to a rise or fall in the standard of living for middle-income earners in Abuja.
Wren (1994) posited that a nation’s standard of living depends on the policies of the government regarding the nation’s infrastructure. Social programs formulated through the Nigerian government’s policies are crucial in explaining the economic emancipation of the middle-income population. Implementation of social programs was ineffective and inefficient due to bureaucracy. Klein (2003) noted, “Weber’s typology on bureaucracy in conjunction with favoritism, nepotism, and tribalism” (as cited in Brown, 2004, p. 14) may lead to ineffectiveness and redundancy in governmental policies.
The Country Reports (2004) reported corruption, nepotism, and favoritism prevented the Nigerian system from building an adequate number of affordable housing units. The minister and mayor of Abuja, El Rufai, revoked and reissued certificates of
occupancy to land owners in Abuja. According to El Rufai (2004), certificates of occupancy were revoked due to previous Nigerian authoritarian leadership styles and governmental policies that failed to address the housing shortage and the lack of affordable housing. Understandably, the minister was entering housing data and
information from particular areas into an FCDA centralized server (Nigeria Central Bank, 2005). Nigerian leadership and governmental housing policies are factors that prohibit stakeholders’ working synergies.
Stakeholders
Stakeholder theories emerged and became prominent in the 1970s (Andriof, Waddock, Husted, & Wells, 2002). Post et al. (2002) noted that stakeholder theories date back to the 1920s during the rejuvenation of General Electric in the United States. Stakeholder theories focus on employees, managers, shareholders, customers, and the public. Focus of the theories was satisfying stakeholders’ needs and wants, which was pivotal to sustainability and longevity of any business, any organization, or any governmental social programs (Bowditch & Buono, 2001; Charreaux & Desbrieres, 2001; Newstrom & Davis, 2002; Schermerhorn, Hunt, & Osbuorn, 2003).
Jonker and Foster (2002) defined stakeholder as “any group who can affect or is affected by the achievement of the firm’s objectives” (p. 188). In Nigeria, stakeholders might oppose the integration of real estate information into an FCDA centralized server. Nutt (2004) posited that stakeholders’ opposition could be antagonistic and even
problematic for any meaningful integration of changes. Change agents, referred to in the agency theories as the principals, and the reluctance to change are at the core of the housing market problems (Nutt, 2004). Affected stakeholders might determine that
technology does not meet or exceed individual needs. Understandably, stakeholders are profiting and benefiting from the lack of affordable housing affecting the middle-income population. Figure 1 describes the interrelationships of the stakeholders.
Availability or Lack of Affordability
Fisher and Urich (1999) noted that when stakeholders established partnerships, social programs were more likely to be implemented, resulting in economic benefits. Fisher and Urich offered that the implementation of social programs (e.g., as a water project in the Philippines) in developing nations could not be realized without funds granted through stakeholders in the private sector.